Things are looking up, but slowly

Published: June 4, 2010

While we are almost halfway through the year, we still have a long way to go. The economic news runs up and down like a yo-yo.A “typo” suggesting that over 1 billion shares of P&G sold (versus 1 million) sent the stock market into a tizzy. We ostensibly added 269,000 jobs in April, but unemployment increased from 9.7 percent to 9.9 percent (more people looking for work are deemed to be back in the job market). Of course, we have the offshore oil well mess in the Gulf of Mexico and the financial meltdown in Greece, so there is plenty to stress about.To top it all off, more long-term Washington legislators are calling it quits and the fall elections are heating up. So the media have plenty to feast on.We have been working on several projects out of market, including New York, New Jersey and North Carolina. Things in New England are quieter than we would like, but from our discussions and meetings with business owners and managers, we sense that the glass is felt to be half-full, not half-empty. Lenders want to lend, and businesses are beginning to want to borrow (to invest in equipment, inventory and a few in new employees). This is happening one firm at a time.The “long slog” is into “headwinds,” which include municipal, state and federal deficits, rising taxes, up-and-down equity markets and low interest rates (which are good if you want to borrow, but not so great if you want interest on savings).It is a mixed bag, and economic pundits on the edges are split between those seeing sudden inflation and those seeing deflation. At the office, we keep our nose to the grindstone, so to speak, but it is hard not to wonder what we should be doing to prepare for the future. This is especially stressful for the 15-plus million unemployed and the 20-plus million underemployed. These folks are in a tough spot, and resources to support them are thin and getting thinner.
Slow and steadyI had lunch the other day with a longtime banker friend who recently moved from a large regional bank to a small community bank. As he said, lending is largely local, and he continues to call on the same companies and customers that he has for 25 years.During the economic run-up in the first part of the decade, the large availability of capital resulted in lending becoming a commodity. Borrowers looked for the best terms and relationships. Then things turned upside down, lending terms became more conservative and some borrowers now feel squeezed from lenders they do not know.The Great Recession resulted in some of the big banks being merged with others. Locally, our community banks continue to provide retail services, struggle to comply with increasing compliance and regulations, and work to cover costs in this low-interest-rate environment.With business generally slow, everyone is out calling on customers and potential customers. This is what I enjoy most about my job. I enjoy meeting people and learning about them and their businesses. There are a lot of intelligent, hard-working folks and they are the heart and soul of our economy.I recently met with two women looking to open their third retail store, an engineer who just purchased the files and records of a retiring engineer and submitted an offer to purchase a large office building, met with two not-for-profits that are looking to merge to reduce overhead, and an investor about to sell a commercial property and wanted to explore a Section 1031 tax-deferred exchange. So things are happening. Not at warp speed, but slow and steady.If we can avoid a double-dip recession, then a year from now employment should be up and folks will be looking for more space, which is good if you are in our line of work.Bill Norton, president of Norton Asset Management, is a Counselor of Real Estate (CRE) and a Fellow of the Royal Institution of Chartered Surveyors (FRICS). He can be reached atwbn@nortonnewengland.com.

This article appears in the June 4 2010 issue of New Hampshire Business Review